Understanding Three-Point (PERT) Estimation
Three-point estimation replaces a single guess with a range: an optimistic value (O), a most likely value (M), and a pessimistic value (P). The PERT weighted average — (O + 4M + P) ÷ 6 — weights the most likely value four times as heavily as either extreme, reflecting that outcomes cluster around the mode. The simpler triangular average — (O + M + P) ÷ 3 — treats all three points equally and is shown for comparison; the gap between the two tells you how much the extremes are pulling on your estimate.
Standard deviation and variance: σ = (P − O) ÷ 6 comes from the heuristic that a distribution's practical width spans about six standard deviations. Variance is simply σ² — and it's the quantity that matters when combining activities. Along a schedule path, variances add; standard deviations do not. To get a path's σ, sum the activity variances and take the square root — a classic exam trap and a real-world planning error.
Confidence ranges and probability: Assuming a roughly normal distribution, about 68.3% of outcomes fall within ±1σ of the estimate, 95.5% within ±2σ, and 99.7% within ±3σ. A target's Z-score — (target − estimate) ÷ σ — converts a deadline or budget into "how many standard deviations away is it?", which maps to a completion probability. Strictly speaking, normality is justified when many activities are summed (the central limit theorem); for a single activity, treat the probability as a useful approximation of a distribution that's actually bounded by O and P.
Estimating hygiene: The most common failure mode is a pessimistic bound that isn't pessimistic enough — people anchor on the most likely value and stretch P only slightly. If your most likely value hugs the worst case, or the spread between bounds rivals the estimate itself, that's a signal to decompose the work into smaller pieces or model it probabilistically rather than committing to a date.
Related tools: Feed your estimates into the Critical Path Calculator to find the schedule they produce, and track how the work actually performs against plan with the Earned Value Management (EVM) Calculator.